Increases to PHX Energy Services Corp.'s (TSE:PHX) CEO Compensation Might Cool off for now
Performance at PHX Energy Services Corp. (TSE:PHX) has been reasonably good and CEO John Hooks has done a decent job of steering the company in the right direction. As shareholders go into the upcoming AGM on 07 May 2021, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. However, some shareholders will still be cautious of paying the CEO excessively.
Check out our latest analysis for PHX Energy Services
How Does Total Compensation For John Hooks Compare With Other Companies In The Industry?
According to our data, PHX Energy Services Corp. has a market capitalization of CA$169m, and paid its CEO total annual compensation worth CA$2.0m over the year to December 2020. That's a notable decrease of 15% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at CA$404k.
On comparing similar-sized companies in the industry with market capitalizations below CA$246m, we found that the median total CEO compensation was CA$665k. This suggests that John Hooks is paid more than the median for the industry. Moreover, John Hooks also holds CA$17m worth of PHX Energy Services stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
Component | 2020 | 2019 | Proportion (2020) |
Salary | CA$404k | CA$425k | 21% |
Other | CA$1.6m | CA$1.9m | 79% |
Total Compensation | CA$2.0m | CA$2.3m | 100% |
Speaking on an industry level, nearly 38% of total compensation represents salary, while the remainder of 62% is other remuneration. In PHX Energy Services' case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
PHX Energy Services Corp.'s Growth
PHX Energy Services Corp. has seen its earnings per share (EPS) increase by 32% a year over the past three years. In the last year, its revenue is down 33%.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. While it would be good to see revenue growth, profits matter more in the end. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.
Has PHX Energy Services Corp. Been A Good Investment?
Boasting a total shareholder return of 52% over three years, PHX Energy Services Corp. has done well by shareholders. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
To Conclude...
The company's decent performance might have made most shareholders happy, possibly making CEO remuneration the least of the concerns to be discussed in the upcoming AGM. However, if the board proposes to increase the compensation, some shareholders might have questions given that the CEO is already being paid higher than the industry.
While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 2 warning signs for PHX Energy Services that investors should think about before committing capital to this stock.
Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.
This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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